On November 14,2014,Scuby Company (A U

question 3

Multiple Choice

On November 14,2014,Scuby Company (a U.S.corporation) enters into a transaction which is denominated in the Canadian dollar.Assume the exchange rate at November 14 is $1.03,and at the December 31 year-end reporting date,the exchange rate is $1.07.On January 27,2015,when the transaction is settled,the exchange rate is $1.05.At the date of settlement,which of the following is correct?

• A)The historical rate = $1.05,and the spot rate at which it is settled is the same as the current rate at $1.07.
• B)The historical rate = $1.03,and the spot rate at which it is settled is the same as the current rate at $1.06.
• C)The historical rate = $1.05,the current rate for reporting at December 31,2014 is $1.07,and the spot rate at which it is settled is $1.03.
• D)The historical rate = $1.03,the current rate for reporting at December 31,2014 is $1.07,and the spot rate at which it is settled is $1.05.

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Definitions:

Plausible Claim

A statement that appears to be believable or worthy of acceptance based on the evidence.

Absent Basis

A scenario where the foundational support or justification for a claim is not provided or missing.

Reliable Way

A method or approach that consistently produces accurate or dependable results.

Critical Thinker

An individual who engages in analysis, evaluation, and synthesis of information in order to form a logical and objective judgment.